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Conservatives Build Case For Closing Corrupt Ex-Im Bank

Ex-Im Bank Sends Taxpayer Dollars Overseas

 

During a question-and-answer period in a hearing yesterday about the Export-Import Bank, Mike McCarthy, acting inspector general of the Ex-Im Bank, told Congressman Jim Jordan (R-Ohio) that the Justice Department may indict individuals involved in 31 open investigations of corruption and fraud at the Ex-Im Bank. This week, the Justice Department charged former Ex-Im Bank official Johnny Gutierrez with bribery for actions he took while employed at the Ex-Im Bank.

Upon hearing this news Chairmen Jeb Hensarling, Jason Chaffetz, Bill Huizenga, and Jordan released the following statement:

“On the heels of news that Johnny Gutierrez was indicted for bribery, it is alarming to hear that even more indictments of fraud related to Ex-Im Bank activities are expected. While this is disturbing enough, the fact that we learned of this only at the end of nearly three hours of testimony, is further evidence of the Bank’s continued and brazen efforts to avoid transparency and accountability. With the Bank’s charter expiring this summer, this adds to the already long list of significant concerns we have over its future viability.”

Financial Services Committee Chairman Jeb Hensarling and Congressman Jordan have been among the driving forces in Congress for ending the cronyism and abuses inherent in the government managed trade model the Ex-Im Bank represents.

But they can’t do it alone.

Our friends at The Club for Growth, especially Club for Growth President David McIntosh, have been tigers on keeping ending the cronyism and corruption of the Export - Import Bank at the top of the agenda for conservatives on Capitol Hill.

After yesterday’s hearing on Ex-Im Bank corruption McIntosh released a statement saying “One after another House Republicans exposed the hazards caused by the taxpayer-supported Export-Import Bank,” said Club for Growth President David McIntosh. “Widespread corruption, fraud, missing data, corporate welfare, and a federal agency competing against the private sector were all on the table today on Capitol Hill. Congressman Jim Jordan (OH) and Congressman Bill Huizenga (MI) deserve credit for chairing this joint hearing, which also exposed the fact that future indictments are possible in at least 31 open fraud investigations involving Ex-Im. As Chairman Jordan said, ‘This is an easy call. This Bank is corrupt and it should be eliminated.’ The Club for Growth agrees and continues to urge Members of Congress to not reauthorize the Export-Import Bank.” 

To get the full picture of why the Ex-Im Bank has to go, especially if you think government managed trade and taxpayer subsidies to export-import business might not be so bad, you really have to watch the video of Rep. Jim Jordan questioning Ex-Im officials at the hearing.

Proposals to "reform" Ex-Im operations are merely trimming around the edges of a bad idea. The core problems with the bank-market distorting loans to politically favored companies-will persist unless Ex-Im authorization is allowed to expire entirely.

Financially unstable and ethically bankrupt organizations including Enron and Solyndra have benefitted from Ex-Im loans.

The assumed benefits of Ex-Im loans are vastly overstated, and offset by the harms caused by the subsidies: U.S. exports hit a record-high $2.2 trillion in 2013, showing no need for government trade assistance. Claims of job creation due to Ex-Im are merely based on extrapolation from national data, not counted according to one project or another, and do not differentiate between full-time, part time, and seasonal employment.

As long as Ex-Im continues to be reauthorized, taxpayers remain exposed to tens of billions of dollars of risk on loans and guarantees.  The bank's Office of Inspector General notes that the bank lacks sufficient policies to prevent waste, fraud, and abuse, while the bank itself doesn't accurately track the status of the subsidies or the fitness of the recipients.

Simply put, the Export-Import Bank has no business existing in a free society, regardless of who the Bank benefits, or who it harms, or how much money it makes.

But the crony beneficiaries of the Ex-Im Bank won’t go quietly. Conservatives must remain alert to any plan to bypass regular order in the Senate or House to preserve Ex-Im, such as slipping reauthorization into a Conference Committee report, and let their Representative and Senators know such a move constitutes an end-run around the democratic process and the interests of the American people.

Please call your Senators and Represenative, the Capitol Switchboard is (1-866-220-0044), and urge them to vote to deauthorize the Ex-Im Bank when it comes to the floor.

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